$6.5M to be Stolen From Fusion Network's Wallet

CEO Dj Qian susptects insider, who had access to the private keys of affected wallet
30 September 2019   819

The price of the Fusion token (FSN) has more than doubled since the developers of the financial blockchain platform Fusion Network announced that they had hacked their wallet. This is written by Decrypt.

According to a statement published on the night of Sunday by project representatives in the official group in Telegram, as a result of breaking into the wallet for exchanging FSN tokens in ERC-20 format for tokens of the project’s own network, a total of 10 million FSN coins of the main Fusion network and 3.5 million were stolen Ethereum-based FSN tokens.

According to CoinMarketCap, this is about 38% of the current cryptocurrency offer. The amount of stolen funds at the time of the hack was estimated at about $ 6.4 million.

After it was stole, we found the [thief] kept moving those stolen FSN in order to wash the address holding FSN, and sent part of the them to exchanges to sell.
 

DJ Qian

CEO, Fusion Foundation

According to him, the tokens remaining in the wallet were transferred to a safe cold storage, and the project representatives also contacted a number of large exchanges, where the stolen tokens allegedly went, including OKEx, Huobi and Bitmax.

DJ Qian also suggested that an attacker could be a person who had access to the private keys of a hacked wallet, noting that the evidence is enough to file a corresponding statement with the police.

Fusion Network is declared as a financial blockchain platform, offering users the ability to quickly and easily exchange cryptocurrency assets and create financial applications.

Court to Ban TON Tokens Release

U.S. District Judge P. Kevin Castel, of the Southern District of New York issued a temporary restiction, therefore supporing the SEC
25 March 2020   941

The American court issued an order to the developer of the Telegram messenger, according to which he should refrain from the distribution of tokens of the TON blockchain project planned for next month.

According to CoinDesk, on March 24, the District Judge of the Southern District of New York, Kevin Castel, issued a temporary injunction, recognizing the SEC's arguments regarding the sale of unregistered securities by the company as reasonable.

The Court finds that the SEC has shown a substantial likelihood of success in proving that the contracts and understandings at issue, including the sale of 2.9 billion Grams to 175 purchasers in exchange for $1.7 billion, are part of a larger scheme to distribute those Grams into a secondary public market, which would be supported by Telegram’s ongoing efforts.

 

Kevin Castel

U.S. District Judge

According to the judge, this feature does not allow considering the Telegram offer as subject to exceptional conditions. He also noted that Telegram structured its project in such a way as to attract “the maximum number of primary buyers” against the background of the expectation of maximum profit at the time of launch.

Considering the economic realities under the Howey test, the Court finds that, in the context of that scheme, the resale of Grams into the secondary public market would be an integral part of the sale of securities without a required registration statement. 

 

Kevin Castel

U.S. District Judge

Conducting an analysis from the standpoint of the Howey test, the judge stated that buyers expected to profit from participating in the campaign. Moreover, although Telegram may argue that it will not become a guiding force in the further development of TON, “in fact,” it will be precisely this.

The judge agreed to distinguish between non-existent Gram tokens and securities purchased by TON investors, but refused to support Telegram's argument that Gram would be a commodity.

The Court rejects Telegram’s characterization of the purported security in this case. While helpful as a shorthand reference, the security in this case is not simply the Gram, which is little more than [an] alphanumeric cryptographic sequence.

 

Kevin Castel

U.S. District Judge

This is not the final decision, but it can serve as a powerful indicator of what position the court will adhere to further.